Grayscale published research on July 9 identifying five blockchain networks positioned to support tokenized equity markets: Ethereum, Solana, BNB Chain, Avalanche, and Canton Network. Head of Research Zach Pandl outlined three phases of equity tokenization, with each phase benefiting different blockchain infrastructure. Third-party wrappers currently account for more than 70% of tokenized stocks by market capitalization, operating primarily on Ethereum, Solana, and BNB Chain, where traditional shares are placed into special-purpose vehicles and investors receive tokens representing claims on those vehicles rather than direct ownership.
Grayscale Outlines Three-Phase Tokenization Framework
The research categorizes equity tokenization into three distinct phases. The first phase involves third-party wrappers, where traditional shares are placed into special-purpose vehicles and investors receive tokens representing claims on that vehicle rather than direct ownership. These wrapped assets operate on Ethereum, Solana, and BNB Chain, where they can be traded and integrated into decentralized finance applications.
Pandl stated that each phase of tokenization could benefit different blockchain infrastructure. The crypto asset manager noted that wrapped tokenized stocks represent more than 70% of the tokenized equity market by capitalization.
The second phase centers on the Depository Trust & Clearing Corporation's planned pilot program. Grayscale describes this approach as the entitlement model, which differs from wrapper-based systems that create claims through separate vehicles. DTCC plans to bring existing eligible securities onchain through regulated post-trade infrastructure rather than issue replacement versions.
The third phase involves issuer-sponsored tokenization, where companies issue securities natively onchain. Grayscale stated this model has the greatest long-term potential and could favor Ethereum, Solana, and Avalanche. The firm noted that wider adoption still requires additional regulatory clarity.
DTCC Selects Canton Network for Regulated Pilot
Canton Network will be the first blockchain used in DTCC's tokenization pilot. Pandl wrote that the tokenization of equity markets is progressing in three phases, with each phase driving value to different types of blockchain infrastructure.
The DTCC pilot represents the entitlement model phase, where existing eligible securities are brought onchain through regulated post-trade infrastructure. Grayscale stated the pilot may help define Canton Network's role alongside public blockchains supporting tokenized assets.
Securitize Pioneers Issuer-Sponsored Stock Tokenization
Securitize became the first public company to tokenize its own common stock at the time of its New York Stock Exchange listing. This represents the third phase of equity tokenization identified by Grayscale, where companies issue securities natively onchain.
Pandl stated that the blockchain networks best positioned to capitalize on the growth in tokenization include Ethereum, Solana, BNB Chain, Avalanche, and Canton Network. Grayscale expects wrappers, DTCC's entitlement model, and issuer-sponsored issuance to coexist for years.
FAQ
Which blockchain networks did Grayscale identify for tokenized equities?
Grayscale identified five blockchain networks positioned to support tokenized equity markets: Ethereum, Solana, BNB Chain, Avalanche, and Canton Network. Head of Research Zach Pandl stated these networks are best positioned to capitalize on the growth in tokenization.
What are the three phases of equity tokenization outlined by Grayscale?
The three phases are: third-party wrappers (where traditional shares are placed into special-purpose vehicles), DTCC's entitlement model (bringing existing securities onchain through regulated infrastructure), and issuer-sponsored tokenization (where companies issue securities natively onchain). Grayscale published this framework in research on July 9.
What role does DTCC play in blockchain tokenization?
DTCC plans to bring existing eligible securities onchain through regulated post-trade infrastructure in a pilot program. Canton Network will be the first blockchain used in DTCC's tokenization pilot, representing the entitlement model phase where securities are brought onchain rather than replaced with wrapper tokens.
